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Nation    

Azarov dispatched to rescue natgas talks
Journal Staff Report

KIEV, March 23 – President Viktor Yanukovych will be sending Prime Minister Mykola Azarov to Moscow on Thursday to bolster his case for lower natural gas prices following the first day of talks with Russia.

The trip, which was previously unscheduled, suggests the gas talks may have encountered a problem and a political decision may be required to move ahead.

Yanukovych spoke on Tuesday with Russian Prime Minister Vladimir Putin by phone before deciding to send Azarov, just as a Ukrainian government team was completing the first day of talks in Moscow.

“Concrete issues have been discussed that may be approved during the official visit to Ukraine by Russian President Dmitry Medvedev,” Yanukovych’s press service announced after the phone call.

Yanukovych said Monday the team, led by Energy and Fuel Minister Yuriy Boyko, will have to make sure that the gas deal is reached before Medvedev arrives in Ukraine on May 17.

Boyko led the team to Moscow early Tuesday to begin the talks as Ukraine seeks to lower prices it pays Russia for importing natural gas.

Ukraine is currently paying $305 per 1,000 cubic meters of Russian gas, and has been seeking to lower the price to $168 per 1,000 cu m, which Russia is charging its ally Belarus.

More realistically, however, the team will be seeking to secure the price at up to $210 per 1,000 cubic meters in 2010, according to a source in the government.

In this case, the source said, the government may postpone a painful measure of hiking domestic gas prices, one of the key demands from the International Monetary Fund.

Meanwhile, Alexei Miller, the CEO of Gazprom, has focused on new problems in relations with Ukraine, including concerns the country has not been buying enough gas to secure future winter demand.

“Unfortunately, over the past time the number of issues that we have to discuss and solve has not decreased, but increased,” Miller was quoted by Interfax as telling Boyko before the talks.

“The situation has been shaping in a way that Ukraine has been buying less gas than planned, less than has been indicated in the contract,” Miller said, adding the issue should become the key point of talks.

That appears to be a distraction from lowering gas prices, an issue that Ukraine has been seeking to focus on.

As an incentive to encourage Gazprom to lower the gas prices, Ukraine has been suggesting creating an international consortium that would operate the country’s gas pipelines.

Andriy Kliuyev, the first deputy prime minister who supervises the energy complex, said Ukraine should invite Russia to join the consortium that would operate the pipelines.

The idea apparently is that Ukraine, Russia and the European Union would each control a third in the consortium to operate the pipelines moving 80% of Russia’s Europe-bound gas.

Russia has been long seeking to gain access to the Ukrainian gas transportation network, one of the largest such facilities in the world, which provides a bulk of Gazprom’s hard currency revenue.

But the urge to join the consortium has dropped over the past five years for Russia, which has been seeking to invest billions of dollars into two pipelines – North Stream and South Stream – that would bypass Ukraine on the way to Europe. (tl/ez)




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